Israel pulled its ground forces out of the Gaza Strip ahead of the 72-hour ceasefire.

AFP: David Buimovitch

Israel has pulled its ground forces out of the Gaza Strip as a 72-hour ceasefire with Hamas is holding in the first step towards negotiations on a more enduring end to the month-old war.

If the calm holds, it would be the longest lull in almost a month of fighting that has killed more than 1,800 Palestinians and 67 Israelis.

Israel said its main goal of destroying cross-border infiltration tunnels in Gaza had been completed, with the military tweeting: "Mission accomplished."

Troops and tanks will be "redeployed in defensive positions outside the Gaza Strip and we will maintain those defensive positions," spokesman Lieutenant-Colonel Peter Lerner said, reflecting Israeli readiness to resume fighting if attacked.

In Gaza, where 500,000 people have been displaced by a month of fighting, some residents, carrying mattresses and with children in tow, left UN shelters to trek back to neighbourhoods where whole blocks have been destroyed by Israeli shelling and the smell of decomposing bodies fills the air.

Sitting on a pile of debris on the edge of the northern town of Beit Lahiya, Zuhair Hjaila, a 33-year-old father of four, said he had lost his house and his supermarket.

"This is complete destruction," he said. "I never thought I would come back to find an earthquake zone."

Minutes before the Egypt-mediated truce began at 8:00am local time on Tuesday (3:00pm AEST), Hamas launched a salvo of rockets, calling them revenge for Israel's "massacres".

Israel's anti-missile system shot down one rocket over Jerusalem, police said, while another hit a house in a town near Bethlehem in the occupied West Bank. There were no casualties.

The Palestinian foreign minister has told investigators at the International Criminal Court in the Hague that there's clear evidence of war crimes by Israel.

Riyad al-Malki says his government is preparing to join the ICC with the aim of pursuing its claims against Israel.

If the Palestinians did join the court, it would open the Palestinian territories to investigations of crimes within their borders.

But during the offensive in Gaza, Israel has also accused Hamas of war crimes for firing rockets indiscriminately towards civilians in Israel.

Efforts continue to secure long-term ceasefire

Several previous truce attempts by Egypt and other regional powers, overseen by the United States and United Nations, have failed to calm the worst Israeli-Palestinian fighting in two years.

An Israeli official said that in the hour before the ceasefire came into effect, the civilian airspace over Tel Aviv was closed as a precaution against Gaza rockets, and takeoffs and landings were delayed at Ben-Gurion Airport.

Gaza officials say the war has killed 1,865 Palestinians, most of them civilians, while Israel says 64 of its soldiers and three civilians have been killed since fighting began on July 8, after a surge in Palestinian rocket launches.

Israel was expected to send delegates to join talks in Cairo to cement a longer-term deal during the course of the truce.

For now, strategic affairs minister Yuval Steinitz told Israel's Army Radio: "There are no agreements. As we have already said, quiet will be answered with quiet."

Hamas spokesman Sami Abu Zuhri said the Islamist movement had also informed Egypt "of its acceptance of a 72-hour period of calm".

Foreign Minister Julie Bishop earlier welcomed the ceasefire but said Australia had noted the unfolding situation in Gaza with "deep concern".

Ms Bishop said it was important that both sides "respect international humanitarian law".

"I am deeply troubled by the suffering being endured by the Palestinian population in Gaza, where many hundreds of innocent people have been killed, including women and children," she said in a statement.

"There have been a number of shocking incidents, including the indefensible shelling of three UN schools, all of which were sheltering civilians."

She said Israel, in exercising its right to self-defence, must take all necessary steps to prevent civilian casualties.

The US state department joined Ms Bishop in welcoming the truce, urging both parties to "respect it completely".

Spokeswoman Jen Psaki added that Washington would continue its efforts to help the sides achieve a "durable, sustainable solution for the long term".

Efforts to turn the temporary ceasefire into a lasting truce could prove difficult, with the sides far apart on key demands.

Palestinians demand an end to the Israeli-Egyptian blockade on impoverished Gaza and the release of prisoners including those Israel arrested in a June crackdown in the occupied West Bank after three Jewish seminary students were kidnapped and killed.

Israel has resisted those demands in the past.

Israel push for demilitarisation of Gaza

Lieutenant-Colonel Lerner said the army had destroyed the last of 32 tunnels located inside Gaza and which had been dug by Hamas for cross-border ambushes at an estimated cost of $100 million.

Israeli officials say, however, that some tunnels may have gone undetected and that the armed forces are poised to strike at these in the future.

Prime minister Benjamin Netanyahu also wants to disarm Hamas and demilitarise Gaza, after guerrillas launched more than 3,300 rockets and mortar bombs at Israel this past month. Hamas has ruled that out.

"For Israel the most important issue is the issue of demilitarisation. We must prevent Hamas from rearming, we must demilitarise the Gaza Strip," Mr Netanyahu's spokesman Mark Regev told Reuters.

Egypt has positioned itself as a mediator in successive Gaza conflicts but like Israel, its current administration views Hamas as a security threat.

Meanwhile in London, a British minister, Sayeeda Warsi, resigned saying she could not support government policy on the war.

While his government has called for a ceasefire in Gaza, prime minister David Cameron has been criticised by the opposition for refusing to describe Israel's military actions in Gaza as disproportionate.